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Judy Greenwald

Failure to renew contract may violate whistle-blower protection law: Court

October 5, 2012


Failing to renew a whistle-blowing worker's contract can be considered a violation of the state whistle-blower protection law, says a Michigan state appellate court in a divided opinion.

According to the Oct. 2 ruling by the Michigan Court of Appeals in Lansing in Richard L. Wurtz v. Beecher Metropolitan District et. al., Mr. Wurtz had an employment contract to serve as administrator with the Flint, Mich.-based Beecher Metropolitan District that extended from Feb. 1, 2000, to Feb. 2, 2010.

In May 2008, Mr. Wurtz sent a letter to various officials complaining that three of the board's five elected members had met privately to discuss public business with an attorney in violation of the state's Open Meetings Act. No action was taken as a direct result of the letter.

In May 2009, Mr. Wurtz expressed disapproval in a memorandum about the possible expense to taxpayers of board members' upcoming trip to a conference in San Diego.

A complaint by Mr. Wurtz to the county sheriff's office about improper reimbursements for that trip led to an investigation of board members by the sheriff's office.

In November 2009, the three directors voted to not extend Mr. Wurtz's employment contract beyond its expiration and to look for a new administrator.

Expectation of employment

Mr. Wurtz filed suit, claiming the board and the three directors had violated the state Whistleblower Protection Act.

Defendants argued that because Mr. Wurtz was a contract employee, failure to renew his contract could not be considered an adverse job action because he had no expectation of employment after his contract's expiration.

But the appellate court disagreed. “Were we to hold that non-renewal of a contract cannot, under any circumstances, qualify as an adverse employment action because a contracted employee has no expectation of further employment past the expiration of his contract, we would carve an arbitrary distinction between contracted and at-will employees (who have no expectation of further employment from day to day),” said the court in its 2-1 opinion.

“Accordingly, we decline to hold that, as a matter of law, the failure to renew an employment contract cannot be an adverse employment” under Michigan's Whistleblowers Protection Act, said the appellate court, in reversing a lower court ruling.

The case was remanded for further proceedings.

 



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